Venezuela has joined the South American trade group MERCORSUR, along with Argentina, Brazil, Paraguay and Uruguay. However, full membership still needs to be ratified by Brazil and Paraguay in 2008. This is expected to increase pharmaceutical know-how, particularly among Brazil, Argentina and Venezuela. As a result, Venezuela pulled out of the Andean Community and the G-3 FTA in 2006. This was Venezuela's latest move to abandon trade deals with countries which have trade agreements with the USA.

Venezuela's anti-American political interests are also shaping the evolution of pharmaceutical regulation in the country. The Venezuelan patent office, SAPI, has so far proven ineffective for the research-based industry, with issues such as data exclusivity protection and linkage high on the agenda. The Office of the United States Trade Representative (USTR) notes that Venezuela has not issued a patent to a foreign pharmaceutical product since 2003.

Venezuela has a complex pharmaceutical legislation. There have been initiatives to update the law of medicines but no agreement has been reached so far. The National Institute of Hygiene Rafael Rangel (INHRR) is known as the Latin American FDA. INHRR is responsible for checking the drugs under the pharmaceutical registration process, and controlling pharmaceuticals already approved and marketed. The registration process is slow for both national and multinational manufacturers.

Pharmaceutical price regulation has increased, which has affected the industry. Enforcement of the new regulation on distribution practices and drug advertising has also been difficult. GMP standards were expected to be enforced in 2005, but the domestic industry has asked for a transitional period, estimated between three and five years. This is another example of the defensive mechanism used by Venezuela to maintain local generic production to the detriment of the European and US research-based industry.

In spite of the regulatory measures, the pharmaceutical market has performed well in recent years, encouraged by increasingly good economic performance and the implementation of the Barrio Adentro Mission. Venezuela is also the preferred market entry within the Andean region as, with over half of the population of Colombia, it has a more substantial pharmaceutical market. Most of the foreign producers have moved their regional operations to other countries though.